Insurance Act

This act sets out mandatory conditions that must be in most types of insurance contracts – life, property and casualty, accident and sickness, group – except auto, which is covered by other statutes.

The Insurance Act has been in the process of being amended for several years. The act, which originated in the 1920s before the advent of multi-peril policies, had conflicting sections that made it difficult for the courts to interpret. The new act is expected to:

• Have the fire parts of the act extend to cover all basic home insurance policies.
• Treat fire following earthquake as a fire peril, not as an earthquake peril, which will keep it at the lower deductible.
• Align limitation periods with those set out in the Limitation Act. This will extend the limitation period in some cases to two years, and apply a single ‘trigger’ definition of “the date the cause of the action arises against the insurer” (the same trigger found in vehicle insurance legislation).
• Maintain and update the Statutory Conditions to protect consumers and enhance contractual standardization.
• Require insurance contracts to maintain coverage of an innocent co-insured.
• Require insurance companies to have in place a dispute resolution system that would be initiated before going to litigation.
• Eventually include a regulation that will define ‘vacancy’ and provide a statutory grace period of 30 days during which coverage for fire, and for vandalism resulting in fire loss, would continue.
• Harmonize with Alberta’s new Insurance Act, which passed in early 2009.

For information on the above: Trudy Lancelyn, IBABC, 604-606-8008, or click here.